Wendys Co (NASDAQ: WEN)
Wendys is one of the few stocks that are showing strong movement in pre-market activity today, and the movement is for a very good reason. The company reported earnings before the bell today, with EPS coming in ahead of expectations. Today, we’ll talk about what we saw from the earnings report, how the market reacted to the news, and what we can expect to see from WEN moving forward.
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What We Saw From WEN Earnings
As mentioned above, Wendys is having a strong day in the market after reporting its fourth quarter and full year earnings before the opening bell today. Here’s what we saw from the report…
- Earnings Per Share – In terms of earnings per share, the company did incredibly well. While analysts expected that WEN would produce earnings in the amount of $0.11 per share, the company actually produced earnings in the amount of $0.12 per share.
- Revenue – When it comes to revenue, Wenydys came in just below what analysts wanted to see. On the revenue front, analysts were expecting to see the company generate $469.2 million. However, WEN actually produced revenue in the amount of $464.4 million.
- Full Year – With the fourth quarter numbers being in, WEN also reported its full year results. In the year 2015, the company produced $0.49 per share in earnings and a total of $1.87 billion in overall revenue.
How The Market Reacted To The News
Earnings seasons are some of my favorite times of the year. That’s because earnings have an incredible ability to move the needle in the stock market. When earnings are positive, stocks climb and when earnings are negative, stocks sink. In this case, while WEN did slightly miss revenue expectations, it came in ahead on EPS. As a result, we saw strong pre-market activity as the result of investor excitement, pushing the stock up more than 3%. However, as soon as the market opened, investors seemed to be reminded of the top-line revenue miss and the overall conditions of the economy and market, leading to losses. Currently (9:41), WEN is trading at $9.77 per share after a loss of 3.74% so far today.
What We Can Expect To See Moving Forward
Moving forward, I have a bit of a mixed opinion with regard to what we can expect to see from WEN. In the long run, I’m expecting to see strong gains. The company is a great company that is known for fresher foods than other fast food restaurants, which will lead to strong sales and earnings in the long run. However, in the short term, my opinion is a bit bearish. First off, the earnings report could have been better. With the miss on revenue, questions are going to be raised about sales growth. Perhaps more importantly, the global market is struggling, and no stock seems to be immune from the declines. So, there’s strong resistance hanging over Wendys at the moment. All in all, I’m not expecting to see strong movement any time soon. However, in the long run, I have high hopes for WEN.
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What Do You Think?
Where do you think WEN is headed moving forward? Let us know your opinion in the comments below!
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